direct tax

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Direct Tax

A tax that cannot be shifted to another person or entity. For example, taxes on income or assets are direct taxes, as the person or organization on whom they are levied must pay them directly. Direct taxes differ from indirect taxes, such as sales tax, which is levied on a seller but is paid by buyers. There is disagreement as to whether a corporate tax is a direct tax or indirect tax.

direct tax

A tax paid by the individual or organization on which it is levied. For example, the personal income tax is levied on individuals, who end up bearing the entire burden of the tax. A direct tax cannot be shifted from the entity on which it is levied. Compare indirect tax.

direct tax

a TAX imposed by the government on the income and wealth of persons and businesses in order to raise revenue, redistribute income and wealth, and as an instrument of FISCAL POLICY in managing the economy. The main forms of direct tax in the UK are INCOME TAX, CORPORATION TAX, NATIONAL INSURANCE CONTRIBUTIONS and INHERITANCE TAX. See BUDGET (GOVERNMENT).

direct tax

a TAX levied by the government on the income and wealth received by individuals (households) and businesses in order to raise revenue and as an instrument of FISCAL POLICY. Examples of a direct tax are INCOME TAX, NATIONAL INSURANCE CONTRIBUTIONS, CORPORATION TAX and WEALTH TAX.

Direct taxes are incurred on income received, unlike indirect taxes, such as value-added taxes, that are incurred when income is spent Direct taxes are progressive, insofar as the amount paid varies according to the income and wealth of the taxpayer. By contrast, INDIRECT TAX is regressive, insofar as the same amount is paid by each tax-paying consumer regardless of his or her income. See TAXATION, PROGRESSIVE TAXATION, REGRESSIVE TAXATION.

References in periodicals archive ?
As we celebrate the 150th birthday of Canada, we also celebrate the 100th anniversary of the implementation of direct taxation in Canada.
In May the International Monetary Fund gave preliminary approval for a three year economic programme in the Maldives after the government agreed to a series of policy reforms to strengthen the economy - which included the implementation of direct taxation, as a way of increasing government revenue and minimizing the widening budget deficit.
A team of researchers at the Institute for Austrian and International Tax Law in Vienna introduce students and practitioners to direct taxation, which remains under the jurisdiction of national governments, but is being increasingly influenced by European law.
Cuts in direct taxation benefit the rich more than the poor, while lower tax receipts leads to cuts in public services, higher unemployment and greater poverty.
While council tax levels are significantly influenced by the Assembly through the revenue support grant settlement (RSG) this is not the same as direct taxation powers.
In an Italian case, judges declared illegal a national law that insisted reverse mergers, (where subsidiaries takeover a parent), should attract a proportional registration duty of 1% of the transaction value, regardless of their direct taxation. This is because under Italian tax law, these deals are taxed up to 0.5% where a parent is transferred to a EU-based subsidiary that is being formed or is already in existence.
Mr Leigh said: 'I believe it is absolutely essential, if we are to galvanise our own support, to have a clear, costed pledge to reduce direct taxation months not weeks before a General Election, based on a clear pledge to cut a specific amount from public expenditure in our first year of office.
Two Danish opposition parties are planning a joint proposal on tax to show voters that they would not raise direct taxation.
With direct taxation, VAT and a further rise of 10 per cent-plus in our council tax, what are pensioners expected to do with a less than two per cent increase in their pension?
Speaking to members of the Institute of Taxation in Dublin on Friday night, the Tanaiste said that there was a consistent campaign to persuade Ireland and other member states to surrender direct taxation policy decisions to the Union.
But he admitted: "It is a Scotland paid for by fair taxation - direct taxation in preference to indirect taxation."
The PM believes that pledging to peg direct taxation is the best way to keep on side the middle classes responsible for Labour's 1997 victory.